Making Money Is My Current Hobby

I enjoy making money. It's such a fun hobby! It's a little hard to explain to people that this is one of my favorite pass-times though. Money still isn't considered polite conversation in most circles. Shame.

My previous hobby used to be saving money. I got such a kick from figuring out how to squeeze the most value out of every free or inexpensive resource available to me (as evidenced by my random desire to make up a budget for living on minimum wage) But I think now I much prefer the idea of having a lot more money flowing through my life.

I want to take a look at what I've been able to do with my income over the past few years. Let's start in 2006.

2006
Main source of income: job, salary of about $30,000
Bought a house: no income yet
Bought a rental house: no income yet
Decided to start a little online business: no income yet
Total: $30,000

2007
Main source of income: job, salary of about $32,000
My house: roommate income about $8700
Rental house: tenant income: (before expenses: $8,500) after expenses, about $500
Business: (before expenses: $650) after expenses about -$1500 :(
Total after expenses: $39,700

2008
Main source of income: job, salary of about $40,000
My house: roommate income about $9850
Rental house: tenant income (before expenses $9500) after expenses about $1500
Business: (before expenses: $3500) after expenses about $2200 :)
Total after expenses: $53,550

2009 (projected)
Main source of income: job, salary $40,000
My house: roommate income about $11,000
Rental house: tenant income (before expenses $9840) after expenses about $1700
Business: (before expenses: $6000) after expenses about $4800
Total: $57,500

Ah, I love watching that number go up! Now, to make it go up faster.... that can be the next challenge in this Great Money Challenge.

Figuring Out How Much to Charge for Organizing Services

I think I just fell into the world of professional organizing.

I like to organize and my friends know it. I've helped out quite a few of them in the past getting their homes, work places, and even classrooms, organized. Well this week, for the first time ever, a friend referred me to someone she knows who is "feeling overwhelmed and wants help getting organized". I know I can help this person but what I don't know is how much I should charge.

There are two ways I can approach this:

1. Charge by the project
   
2. Charge by the hour

Charge by the Project
At this stage, I don't really know how long a particular project will take. I've never timed myself before and I don't want to quote something that will be way off. I really value my time and I don't want to end up under-estimating and be stuck with a project that will suck hours of my time without adequate compensation. Having said that however, I think once I have a sense of the time required to complete certain projects, this is a better way to go. It gives a nice wrapped up pricing package to the client and there are no surprises.

Charge by the Hour
It looks like this is what I will be going to start with. There are a couple of things to take into consideration here. How much value am I providing to the client (how much my services are actually worth) and how much I value my own time (how much will I trade my time for).

I do value my time a lot and I much prefer to set up streams of passive income where I don't actually have to trade my time for money after the initial set-up is done. If this is all I was going by, then I would charge quite a lot. At one point I had a consulting gig where my client paid me $125/hour.. and that was nice.

Now, how much value am I providing this client? As I said, I'm good at organizing, and I'm also actually pretty good at the psychological game of helping someone through a process like that. But, I am just starting out so I know there will be glitches. I also spent a little bit of time with this client today and I know that he's got good ideas and doesn't really need my "expertise" to help him come up with strategies and systems, he really just needs someone to be there while he does it.

So, what are the various price ranges I could consider? Here are the price points for contract work that I am familiar with in my world, from highest to lowest:

$125/hr Paid to me for my consulting services by a very well-off family.

$75/hr Rate for local professional organizer

$60/hr Acupuncture

$20/hr What I pay friends who I hire for handyman type work


I'm thinking It'll have to be somewhere between $20 and $60. Let's figure out what I feel about these numbers...

• I'm not giving up an hour of my life for just $20 or $25.
  
• $50 seems too much for just "being there"
• $30 or $40?
  

Ok, I think I will go for $35/hour for this client and see how I feel about it by the end. I wonder if he'll accept that though? I may be willing to negotiate down to $30, but not lower than that.

Will update after this gig is over with thoughts about a future pricing plan.

Thirty Bucks in the Mail

I love getting unexpected money! A long while ago I'd filled out some random form to participate in the class action settlement for Airborne. I had forgotten all about it, but yesterday they sent me a check in the mail :big grin:

I've started keeping track of the random bits of money that finds its way to me. I love looking at that list. Just a month ago Nielson's Ratings sent me $30 cash in the mail to fill out a viewing diary. Heck, that was easy, I barely watch any television.

Then, the week after that my mortgage company sent me about $270 dollars because I had an escrow overage for the year. AND they told me that my monthly payments were going down by $10 every month.

I love these money gifts from the Universe.

I Wrote a Check for $10,000

Yesterday I wrote a check for $10,000 and dated it 5/20/2008. That's less than two months away. It will stay in my checkbook until then.

My heart almost leaped out of my chest as I wrote that check. It wasn't fear racing through me though, it was excitement. Odd that I should be excited -and not fearful- about writing a huge check for an amount that is not currently in my accounts. Yes, that's right, I don't have all that money right now and I'm not sure where it will come from. I just know I'm ready to jump.

This check is for my favorite charity- a place I have worked with and supported for about ten years. Ten years, ten thousand, it just seemed appropriate.

Many years ago, right after I got married, my husband told me about a cousin who was having some medical problems. This cousin was a young guy who didn't have insurance when he had to go in for treatment and now had some hefty medical bills. I had an intense urge to give him all the money we had just received as wedding gifts to help him wipe out those bills. But I never said anything. My husband and I were pretty broke at the time- right out of college- with college loans, tiny paychecks, no furniture, and a car that was dying. I took the practical route and used the money to live on.

I think about that time often. I don't have strong regrets but I do wonder what would have happened if we'd given the money away instead of using it. I think it would have felt really good.

Really good. Like the feeling I had last night when I wrote my check. This time I'm giving it away for sure. Just waiting for the rest of the money to arrive...!

I will keep you posted.

Top 10 Ways I Make Money

Last month I wrote about the top 10 things I do to save money. This month I thought I'd make a different top 10 list and address the flip side of the personal finance coin.

So here are the top 10 things I do to make money:

1. Regular full-time job. This is currently my biggest source of income. I love my job but eventually I would like to make enough money from other sources to make this a much smaller percentage of my income. In the meantime however, I did get a hefty raise in November and I have plans to negotiate another raise soon.

2. Roommates who pay me rent. They get to live in my great little house for a fantastic price, and I get to have most of my mortgage paid by others. Win-win.

3. Second job This hourly job fell into my lap when a friend asked for some help with his business venture. The hourly rate is more than my full-time job but I only work about 30 hours a month. I am going to continue doing this job because I am actually learning some handy new skills and maintaining networking connections with people who I might want to do serious business with in the next few years.

4. Rental property I purchased a small 3br single family investment house a year and a half ago and have been learning how to keep it rented. This has been a tricky source of income because occupancy is never guaranteed. If I were to do this over, I would have negotiated a lower purchase price and better terms... and maybe bought in a neighborhood half a mile north of this one. However, despite the less-than-ideal conditions, my conservative side did insist on buying a house that I could afford even if it stayed vacant indefinitely. So far, I've been putting all the income from this house back into the property (either for maintenance or in a fund for emergencies/ improvements). According to my tax calculations, which take into account depreciation, I've had a loss on this property which has resulted in a nice tax refund. I also live in an area that escaped the housing bubble so property values are continuing to hold steady and even creep up a little. In the long term, if I can keep it rented, this house will be a steady little investment.

5. Business About a year ago I began to explore a side business. Getting this off the ground has been slow going... but fun. I have learned a lot. I am starting to pay more attention to appropriate marketing strategies for this business which provides products I have created for a very small and specific niche. So far I have broken-even on this venture and expect that I will be heading into profit territory soon. Once again, my expenses here helped to boost my tax refund.

6. Consulting Once in a while I do some freelance consulting. I am still of two minds about how much time I want to spend on this kind of activity. I would ultimately like to put less emphasis on sources of income that require a specified amount of time/personal energy to generate revenue.

7. Financial investments This includes any interest earned on my savings accounts and dividends and capital gains on stocks and funds. Last year I spent a few months trying my hand at more active stock trading but decided it wasn't interesting or lucrative enough for me to devote that much time to it. Now I stick to a more easily managed portfolio of funds that I don't have to think about more than a couple of times a year. This portfolio is still pretty small but one of my goals this year is to really pump it up.

8. Online activities My income from the internet is very small but I have decided that as long as the source/activity is interesting enough, then every penny coming in counts! These activities include such things as participating in cash rebate programs such as Inbox Dollars and Mypoints and having some advertisements on my blog. Some of these activities don't require much effort at all (but also don't generate much income).

9. Multi-level marketing This is brand new and still a... twinkle in my eye! In the next couple of months I am going to get involved with a company that two of my friends have had some success with and see how it goes. It doesn't require any money to start up so I figured I've got nothing to lose except for a few hours and I can help my friend out in the process.

10. ..... I tried. I couldn't come up with #10! I don't sell items on eBay or hold yard sales (I don't have enough stuff to get rid of and the stuff I do get rid of I freecycle). I don't babysit or mow lawns or shovel sidewalks. I guess you could read about the money that seems to find its way into my life without my necessarily doing much for it in Found Money.

That's my list. Perhaps a next step would be to make a nifty pie-chart and compare how much of my income comes from the different sources.

Rolling In It

We're only half way through the month but I am declaring March the best month of the year! Well, so far anyway; I don't want to rule out the possibility that things could get even better. I've had more money coming my way this month than I could have possibly imagined.

Here's how it breaks down:

• Federal tax refund: $1800

• State tax refund: $300 (anticipated, not yet deposited)

• Side-business income: $1900

• Refund from mortgage company for an escrow overage: $350

Total: $4350

This has made the following possible:

• Pay off all my credit cards (including the business card)- check out the progress bars on the right!
  

• Fully fund my travel account

• Give about $400 away to people/causes that I support

Other good stuff:

• I discovered that I could still open a Roth IRA for 2007 and deposit money into it. I did. I transferred the full $4K for '07 and another $2500 for '08 from my ING account.

• Looks like my monthly escrow payments are going down by $40 each month.

• One of my roommates will be moving out and I am planning on moving into her room and renting out my larger gorgeous room for an extra $100/month. This will bring my housing expenses down to $265/month. Throw in the $40 reduction from above and we're looking at a monthly outlay of $225. Wow.

At the end of the month I'll tell you more about how I've gone over budget in some areas... but it's all still good! Yay! This is my version of march madness and I love it!

$6 an Hour for Clicking Emails?

One of the ways I accumulate a few extra dollars each year is through online programs such as Inbox Dollars and MyPoints.

These programs seem to be designed mainly to get you to shop through their websites so they can accumulate their own affiliate rewards. The way they entice you is by offering you a share of the rewards by giving you a rebate either in the form of cash back or points. However, the thing that works for us frugal folks is that they also give out small amounts of rewards simply for opening the advertising emails they send you about their affiliates.

I recently mentioned these programs in my post Found Money. Jacob (who has a fantastic blog if you haven't already seen it) wondered if clicking these emails was worth the time it took. I decided to find out.

Here's what I discovered:

It took me just under one minute to go through three emails. This involved opening the message, clicking on the one (or two) required buttons to confirm that I had read it, and then deleting the message. I do use tabbed browsing with Firefox so while the advert was opening in another tab I was easily able to move on to the next message in my inbox.

At Inbox Dollars my earnings seem to be averaging about 3.5 cents per email read.
At the rate of 3 emails per minute, that's 10.5 cents per minute or $6.30 per hour.

At MyPoints each email earns 5 points.
At the rate of 3 emails per minute that's 15 points per minute or 900 points per hour.
What's the dollar value of 900 points? See this discussion at I've Paid For This Twice Already
for some interesting details. If I go with the most expensive redemption value (which means I could earn more) then I can get $1 for every 150 points.
So if I have 900 points, that's worth $6

Isn't that interesting? It looks like my hourly rate for clicking emails is more than the federal minimum wage.

By the way, the Inbox Dollars links here are referral links. You can get $5 for signing up (and after you reach a certain earnings level I will get $5 too... so thank you for joining!)

Tips

• I use a separate email account for these kinds of programs so their emails don't clutter up my regular inbox.

• I used tabbed browsing with Firefox (I believe the newer versions of IE have that too) which makes it easier to zip through the emails.
  
  
  

• I'm not a shopaholic so I don't get tempted by the offers. Many of the offers are from your standard retailers and the deals can be pretty good.
  

• If you are already planning to buy something and can't get a better rebate froma different program, you may want to shop through these sites and earn rewards a LOT faster than just by clicking their emails.
  

Found Money

I'm usually pretty good about making a budget with my regular income sources and sticking to it but I've never sat down to account for all the little bits of money that happen to come my way from other sources.

Based on my activities over the past few years and some new stuff I have recently begun, here's what I can reasonably expect over the year:

Credit card cash back: $100
(for living expense purchases I would make anyway)

Mypoints: $50
(just for clicking emails, no shopping. I will get this in the form of a gift card to a store I regularly shop at for living expenses)

Inbox Dollars (referral link): $50
(just for clicking emails, no shopping; you can get $5 just for signing up)

Bond Rewards: $100
(online shopping for some of my living expenses- but this money is in the form of US savings bonds that will mature at a later date)

ING savings account interest: $150
(after accounting for taxes and even if I end up spending some of my emergency fund )

Health Insurance Rebate for Gym Membership : $300
I would maintain my gym membership regardless of the rebate, so this really is a bonus.

Property Tax Rebate: $250

That's an extra $1000 over the year. Not too shabby!